Saturday, October 31, 2009

Robert Kuok's departure from sugar business: A sign of the times?

This transaction may have more stories that will never be told than what is told. Is it a sign of the times?

Why would a solidly run company dispose off a key contributor to the Malaysian arm of its food commodities business? Why sell off it's market dominance in Malaysia? That is so very unlike Robert Kuok.

Kuok isn't called "The Sugar King" for nothing. Well, he's still got his sugar interests outside of Malaysia.

This is a nuanced post because the transaction is nuanced.

PPB Group Bhd, controlled by tycoon Tan Sri Robert Kuok, stands to lose its dominance of the domestic sugar market under a proposal to sell its entire stake in two sugar units and land used for sugar cane cultivation to Federal Land Development Authority (Felda) for RM1.29 billion.

The proposed sale will see PPB exiting the local sugar industry, which had earned founder Kuok his nickname of "Sugar King".

PPB said it will dispose of its entire 36.36 million shares of RM1 each in Malayan Sugar Manufacturing Co Bhd (MSM) to Felda Global Ventures Holdings Sdn Bhd, a wholly-owned unit of Felda.

It is also selling its 50 per cent stake, or six million shares of RM1 each, in Kilang Gula Felda Perlis Sdn Bhd to Felda Global Ventures for RM26.31 million.

Felda Holdings Bhd already holds a 50 per cent stake in the company, which is involved in sugar cane milling and refining of domestic and imported raw sugar.

The group said the disposal of these three assets will help it realise its investments with a substantial gain.

Meanwhile, its 49 per cent-owned associate Grenfell Holdings Sdn Bhd will sell its stake in plantation group and sugar refiner Tradewinds (M) Bhd for RM207.53 million.

According to PPB's 2008 annual report, MSM and Kilang Gula Felda Perlis produced more than 750,000 tonnes of refined sugar, supplying some 60 per cent of the domestic sugar requirements last year.

Its sugar refining and cane plantation business contributed 27 per cent to the group's revenue of RM3.46 billion and 36.5 per cent to its operating profit of RM431.2 million in the fiscal year ended December 31 2008.

This makes the business its second largest contributor, after its grains and feed business.

Let's see how long they can sustain the business without the Chinese founder. I give them 3 month and they will raise the price and asked for more subsidy from the government which mean legally stealing from the taxpayer again. Like the banking business they steal then one by one the try to used government power to steal all the Chinese business by studying the financial report from finance ministry. Sometime they got cheated by smart Chinese con businessman but most of the genuine business is take away over time. They will take it at its best performance expecting to make overnight billionaire but one by one will cause the company to go bankrupt by diverting the money into their Swiss bank account. There is no future in this country if you are good. They are like the black African cannot compete so chase away the white and blame the white. When the white is gone they will kill each other anyway. Mahathir is the cause of all this. In his statement in 1997 he said that like golf there must be handicap. He had tie us with one hand and one leg to race for 22 year. Two generation was fuck by an ass hole who is only an average IQ guy compare to a Chinese. But he is too greedy after sucking dry the Chinese he found that the other race including his own is rich now, what more he start to suck them too so that is when they split and kill each other. He step aside and groom one son to be the billionaire and another as his successor. For outside he is playing his card thinking the country is full of fools. Maybe he is right for some of them are still ignorance but their children are not. I pray the he and his defendant are damn for eternity for causing two generation to suffer. Fuck Mahathir Mohamed his crony and his descendant.